“if every new unit of the medium of exchange was “backed” by things of value, there couldn’t be inflation.”
Really? So if every dollar bill was backed by an oz of gold, and the US discovered 1 trillion ozs of and mined it, and 1 trillion dollars were printed, backed by all that gold, and introduced into the money supply, what do you thing would happen? Inflation.
Some think that the Long Depression of 1873-1896 was caused, or at least exacerbated, by the lack of new gold supplies after the California Gold Rush plus the demonetization of silver. This caused deflation because the economy was expanding faster than the money supply.
It was alleviated by the South African and Alaskan gold discoveries.
https://en.wikipedia.org/wiki/Long_Depression
This is a terrific clarification or even correction.
When the Europeans discovered the New World, the availability of silver and gold increased tremendously and guess what happened to prices of things such as wheat, pork, leather, unskilled and skilled labor?
Those prices went up.
The historical episode is called The Price Revolution.
Long before that, Aristotle said money should consist of things of value, such as iron or silver, even though the value of money (relative to other things) would fluctuate due to the supply and demand of the things that are money. [1]
But, by the time of the discovery of the New World, the Europeans were so used to inflation resulting from the debasement of originally silver denarius coins of the Romans, that they thought you couldn’t have inflation with full-bodied coins.
Yet, you could.
The proper definition of inflation is (as I stated): an increase in the medium of exchange in excess of the increase of goods and service; and, yes, this can happen with commodity-backed money. But, as argued by Aristotle and many others through history, usually this problem is associated with unbacked money.
[1] other examples of inflation with commodity-money include wampum in New England during the colonial period; and, tobacco-money in Virginia also during the colonial period.